Xiaomi will put up a third of the capital for Xiaomi Yangtze Industry Fund, which will target hardware investments, with Hubei's guidance fund and the province's largest city the other LPs.

China-based smartphone manufacturer Xiaomi has agreed to form a RMB12bn ($1.74bn) strategic investment fund in partnership with the government of the Chinese province of Hubei, Caixin reported yesterday.

Xiaomi, Hubei’s guidance fund Yangzte River Industry Fund, and the government of Hubei’s largest city, Wuhan, have agreed to each provide 33% of the capital for Xiaomi Yangtze Industry Fund, with the RMB12bn figure representing the overall target.

The fund will invest in companies that would be able to expand the Mi…